|
SNT
SNT
SNT - Santam Limited - Reviewed interim report for the six months ended 30
June 2008
SANTAM LIMITED
Registration number 1918/001680/06
ISIN ZAE000093779
JSE share code: SNT
NSX share code: SNM
REVIEWED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2008
Highlights
- Core underwriting business performing well
- SA underwriting margin of 5.7%
- Generated R981 million cash from operations
- Solvency ratio of 40%
- Interim dividend maintained at 166 cps
CONSOLIDATED BALANCE SHEETS
Reviewed Reviewed Audited
At 30 At 30 At 31
June 08 June 07 Dec 07
Notes R R R
million million million
ASSETS
Non-current assets
Property and equipment 54 63 38
Intangible assets 130 147 135
Deferred income tax 44 39 40
Investments in associates 226 240 175
Financial assets - at fair
value through income
Equity securities 3 3 669 5 672 4 454
Debt securities 3 2 464 2 255 2 901
Current assets
Reinsurance assets 2 572 2 026 2 026
Deferred acquisition costs 209 222 239
Loans and receivables
including insurance 3 2 137 1 747 1 947
receivables
Income tax assets 11 3 27
Cash and cash equivalents 4 167 5 682 3 445
Non-current assets classified 4 2 239 - 2 060
as held for sale
Total assets 17 922 18 096 17 487
EQUITY
Capital and reserves
attributable to the company`s
equity holders
Share capital 107 99 105
Treasury shares (691) (713) (726)
Other reserves 1 204 1 186 1 147
Distributable reserves 3 205 6 026 3 448
Amounts recognised directly in
equity relating to non-current 145 - 71
assets classified as held for
sale
3 970 6 598 4 045
Minority interest 133 127 133
Total equity 4 103 6 725 4 178
LIABILITIES
Non-current liabilities
Deferred income tax 3 249 91
Financial liabilities - at
fair value through income
Debt securities 5 788 553 908
Investment contracts 376 289 525
Derivative 3 113 28 47
3
Financial liabilities - at
amortised cost
Cell-owners` interest 422 383 336
Current liabilities
Insurance liabilities 8 354 8 194 7 630
Deferred reinsurance 50 55 99
acquisition revenue
Provisions for other 87 152 87
liabilities and charges
Trade and other payables 1 776 1 350 1 492
Current income tax liabilities 69 118 488
Liabilities directly 4
associated with non-current
assets classified as held for 1 781 - 1 606
sale
Total liabilities 13 819 11 371 13 309
Total shareholders` equity and 17 922 18 096 17 487
liabilities
CONSOLIDATED INCOME STATEMENTS
Notes Reviewed Reviewed Audited
Six Six Change % Year
months months ended
ended ended 31 Dec
30 June 30 June 2007
2008 2007 R
R R million
million million
CONTINUING OPERATIONS
Gross written premium 6 801 6 269 8% 13 173
Less: reinsurance premium 1 282 1 138 2 254
Net premium 5 519 5 131 8% 10 919
Less: change in unearned
premium
Gross amount (229) 56 330
Reinsurers` share 54 (78) (127)
Net insurance premium 5 694 5 153 11% 10 716
revenue
Investment income 6 372 279 33% 666
Income from reinsurance
contracts ceded 180 162 306
Net (losses)/gains on
financial assets and
liabilities at fair value (480) 463 (204%) 454
through income
Net income 5 766 6 057 (5%) 12 142
Insurance claims and loss
adjustment expenses 5 096 3 886 8 552
Insurance claims and loss
adjustment expenses
recovered from reinsurers (1 160) (487) (1 250)
Net insurance benefits and 3 936 3 399 16% 7 302
claims
Expenses for the acquisition 999 873 1 794
of insurance contracts
Expenses for marketing and 613 574 1 262
administration
Expenses for asset 12 12 27
management services rendered
Amortisation of intangible 6 1 2
assets
Expenses 5 566 4 859 15% 10 387
Results of operating 200 1 198 (83%) 1 755
activities
Finance costs (45) (9) (45)
Share of profit of 11 50 76
associates
Profit before tax 166 1 239 (87%) 1 786
Tax 7 7 (280) (542)
Profit for the period from
continuing operations 173 959 (82%) 1 244
DISCONTINUED OPERATIONS
Loss for the period from
discontinued operations 4 (63) (21) (168)
Profit for the period 110 938 (88%) 1 076
Attributable to:
- equity holders of the 100 928 (89%) 1 050
company
- minority interest 10 10 26
110 938 1 076
Earnings attributable to
equity shareholders
Earnings per share (cents) 9
Basic earnings per share 89 804 (89%) 924
Diluted earnings per share 88 793 (89%) 914
Headline earnings per share 89 803 (89%) 906
Diluted headline earnings 88 793 (89%) 897
per share
Weighted average number of
shares (millions) 112.40 115.45 113.67
Weighted average number of
ordinary shares for diluted
earnings per share 113.01 116.98 114.81
(millions)
Dividend per share (cents) 166 166 - 410
Special dividend per share - - 2 200
(cents)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the company
Amounts
recognised
directly
in
equity
relating
to
Distri- non-
Share Treasury Other butable current
Capital shares reserves reserves assets
R R R R held for
million million million million sale
R
million
Balance as at 1 71 1 119 5 437
January 2007
Share issue 34
Net purchase of
treasury shares (726)
Profit for the 1 050
period
Transfer to 93 (93)
reserves
Share-based 14
payments
Currency
translation 6
differences
Dividends paid (2 960)
Interest acquired
by minorities
Amounts recognised
directly in equity
relating to non-
current assets
classified as held (71) 71
for sale
Balance as at
31 December 2007 105 (726) 1 147 3 448 71
Share issue 2
Purchase of
treasury shares (21)
Sale of treasury 56
shares
Profit for the 100
period
Transfer to 32 (32)
reserves
Share-based 14
payments
Loss on sale of
treasury shares (52)
Currency
translation 99
differences
Dividends paid
(273)
Amounts recognised
directly in equity
relating to non-
current assets
classified as held (74) 74
for sale
Balance as at 30
June 2008 107 (691) 1 204 3 205 145
Balance as at 1
January 2007 71 1 119 5 437
Share issue 28
Net purchase of
treasury shares (713)
Profit for the 928
period
Transfer to 35 (35)
reserves
Share-based 6
payments
Currency
translation 32
differences
Dividends paid (310)
Interest acquired
by minorities
Balance as at 30
June 2007 99 (713) 1 186 6 026 -
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued)
Minority
interest Total
R million R million
Balance as at 1 123 6 750
January 2007
Share issue 34
Net purchase of
treasury shares (726)
Profit for the 26 1 076
period
Transfer to -
reserves
Share-based 14
payments
Currency
translation 6
differences
Dividends paid (17) (2 977)
Interest acquired 1 1
by minorities
Amounts recognised -
directly in equity
relating to non-
current assets
classified as held
for sale
Balance as at 31
December 2007 133 4 178
Share issue 2
Purchase of
treasury shares (21)
Sale of treasury 56
shares
Profit for the 10 110
period
Transfer to -
reserves
Share-based 14
payments
Loss on sale of
treasury shares (52)
Currency
translation 99
differences
Dividends paid (10) (283)
Amounts recognised
directly in equity
relating to non-
current assets
classified as held -
for sale
Balance as at
30 June 2008 133 4 103
Balance as at
1 January 2007 123 6 750
Share issue 28
Net purchase of
treasury shares (713)
Profit for the 10 938
period
Transfer to -
reserves
Share-based 6
payments
Currency
translation 32
differences
Dividends paid (10) (320)
Interest acquired
by minorities 4 4
Balance as at 30
June 2007 127 6 725
CONSOLIDATED CASH FLOW STATEMENTS
Notes Reviewed Reviewed Audited
Six Six Year
months months ended
ended ended 31 Dec
30 June 30 June 2007
2008 2007
R R million R million
million
Cash generated from operations 981 956 2 139
Interest paid (45) (9) (45)
Income tax paid (493) (214) (288)
Net cash from operating 443 733 1 806
activities
Cash flows from investing
activities
Cash generated/(utilised) in 791 136 (197)
investment activities
Acquisition of subsidiary, net 8 (3) (30) (61)
of cash acquired
Cash acquired through the - 41 52
acquisition of subsidiary
Purchases of equipment (30) (12) (32)
Proceeds from sale of equipment - - 3
Acquisition of associated (55) - -
companies
Proceeds from sale of associated - 1 21
companies
Acquisition of book of business - - (2)
Proceeds from sale of business 57 - -
operations
Net cash from investing 760 136 (216)
activities
Cash flows from financing
activities
Proceeds from issuance of 2 28 34
ordinary shares
Purchase of treasury shares (21) (713) (726)
Proceeds on sale of treasury 3 - -
shares
Increase in debt securities - 591 964
(Decrease)/Increase in (177) - 230
investment contract liabilities
Dividends paid to company`s (273) (310) (2 960)
shareholders
Dividends paid to minorities (10) (10) (17)
Increase in cell-owners` 86 54 8
interest
Net cash used in financing (390) (360) (2 467)
activities
Net increase/(decrease) in cash 813 509 (877)
and cash equivalents
Cash and cash equivalents at 4 257 5 142 5 142
beginning of period
Exchange gains/(losses) on cash 152 31 (8)
and cash equivalents
Cash and cash equivalents at end 5 222 5 682 4 257
of period
Non-current assets classified as (1 055) (893) (812)
held for sale
Cash and cash equivalents at end
of period - 4 167 4 789 3 445
Continuing operations
Cash flows relating to
discontinued operations
Included in the above are the
following cash flows from
discontinued operations:
Operating cash flows (214) 38 233
Investing cash flows 318 22 (25)
Financing cash flows - - (197)
Net increase in cash and cash 104 60 11
equivalents
Cash and cash equivalents at 812 808 808
beginning of period
Translation gains/(losses) on
cash and cash equivalents 139 25 (7)
Cash and cash equivalents at end 1 055 893 812
of period
NOTES TO THE ABRIDGED FINANCIAL REPORT
1.Basis of presentation and accounting policies
The consolidated financial statements for the six months ended
30 June 2008 are prepared in accordance with International Financial
Reporting Standards (IFRS), IAS 34 - Interim Financial Reporting and in
compliance with the Listing Requirements of the JSE Limited. The
condensed consolidated interim financial statements do not include all
of the information required by IFRS for full annual financial statements.
The principal accounting policies used in preparing the reviewed results
for the six months ended 30 June 2008 are consistent with those applied
in the annual financial statements for the year ended 31 December 2007
and for the results for the six months ended 30 June 2007 in terms of IFRS.
In the 2008 balance sheet and income statement, the European insurance
operations are presented in terms of IFRS 5 - Non-current Assets Held for
Sale and Discontinued Operations. The comparatives for June 2007 have
been restated on the income statement.
2.Segmental report
To ensure more meaningful disclosure, only the continuing activities are
reported on a segmented basis below.
2.1. For the six months ended 30 June 2008
Insurance Investment
activities activities Total
Business activity R R R
million million million
Revenue 6 801 (271) 6 530
Gross written premium 6 801 6 801
Net written premium 5 519 5 519
Net earned premium 5 694 5 694
Claims incurred 3 936 3 936
Net commission 819 819
Management expenses 613 613
Underwriting result 326 - 326
Investment return on 129 129
insurance funds
Net insurance result 455 - 455
Investment income net of (294) (294)
management fee
Income from associates 11 11
Amortisation of (6) - (6)
intangible assets
Income before taxation 449 (283) 166
Total assets 9 324 6 359 15 683
Total liabilities 11 113 925 12 038
Gross Under- Total Total
written writing assets liabilities
premium result R R
Insurance class R R million Million
million million
Accident and health 184 20 32 134
Alternative risk 968 3 440 1 881
Crop 82 66 6 13
Engineering 244 69 85 266
Guarantee 7 4 21 36
Liability 516 231 849 2 012
Miscellaneous 10 3 6 23
Motor 2 719 185 90 1 235
Property 1 896 (253) 1 173 2 525
Transportation 175 4 79 279
Unallocated - (6) 12 902 3 634
Total 6 801 326 15 683 12 038
Comprising:
Commercial insurance 3 256 246 2 318 6 126
Personal insurance 2 577 83 23 397
Alternative risk 968 3 440 1 881
Unallocated - (6) 12 902 3 634
Total 6 801 326 15 683 12 038
2.2 For the six months ended 30 June 2007
Insurance Investment
activities activities Total
Business activity R R R
million million Million
Revenue 6 269 639 6 908
Gross written premium 6 269 6 269
Net written premium 5 131 5 131
Net earned premium 5 153 5 153
Claims incurred 3 399 3 399
Net commission 711 711
Management expenses 574 574
Underwriting result 469 - 469
Investment return on 144 144
insurance funds
Net insurance result 613 - 613
Investment income net of 577 577
management fee
Income from associates 50 50
Amortisation of (1) (1)
intangible asset
Income before taxation 612 627 1 239
Total assets 8 719 7 326 16 045
Total liabilities 9 492 596 10 088
Insurance class Gross Under- Total
written writing Total Liabili-
premium result assets ties
R R R R
million million million million
Accident and health 160 9 33 129
Alternative risk 942 7 385 1 935
Crop 83 (47) 55 109
Engineering 240 132 163 309
Guarantee 9 19 22 35
Liability 488 176 756 1 676
Miscellaneous 13 (3) 9 25
Motor 2 380 107 85 1 076
Property 1 803 68 482 1 511
Transportation 151 1 74 237
Unallocated - - 13 981 3 046
Total 6 269 469 16 045 10 088
Comprising:
Commercial insurance 2 990 417 1 638 4 274
Personal insurance 2 337 45 41 833
Alternative risk 942 7 385 1 935
Unallocated - - 13 981 3 046
Total 6 269 469 16 045 10 088
2.3 For the year ended 31 December 2007
Insurance Investment
activities activities Total
Business activity R R R
million million million
Revenue 13 173 832 14 005
Gross written premium 13 173 13 173
Net written premium 10 919 10 919
Net earned premium 10 716 10 716
Claims incurred 7 302 7 302
Net commission 1 488 1 488
Management expenses 1 262 1 262
Underwriting result 664 - 664
Investment return on insurance 319 319
funds
Net insurance result 983 - 983
Investment income net of 729 729
management fee
Income from associates 76 76
Amortisation of intangible (2) - (2)
asset
Income before taxation 981 805 1 786
Total assets 7 897 7 530 15 427
Total liabilities 10 724 979 11 703
Insurance class Gross Under- Total
written writing Total Liabili-
premium result assets ties
R R R R
million million million million
Accident and health 331 12 33 138
Alternative risk 1 780 50 456 1 880
Crop 436 (87) 114 254
Engineering 508 201 64 240
Guarantee 20 30 22 37
Liability 1 068 301 891 1 994
Miscellaneous 27 (1) 9 26
Motor 4 941 164 60 1 135
Property 3 719 (10) 542 1 769
Transportation 343 4 74 258
Unallocated - - 13 162 3 972
Total 13 173 664 15 427 11 703
Comprising:
Commercial insurance 6 600 558 1 798 4 978
Personal insurance 4 793 56 11 873
Alternative risk 1 780 50 456 1 880
Unallocated - - 13 162 3 972
Total 13 173 664 15 427 11 703
Reviewed at Reviewed Reviewed
30 June at 30 June at 31 Dec
2008 2007 2007
R million R million R million
3. Financial assets at fair value
trough income
The group`s financial assets are
summarised below by measurement
category
Fair value trough income 6 020 7 899 7 308
Loans and receivables 2 137 1 747 1 947
Total financial assets 8 175 9 646 9 255
Financial assets at fair value
trough income
Equity securities
-quoted 3 651 5 651 4434
-unquoted 18 21 20
3 669 5 672 4 454
Derivatives (113) (28) (47)
Debt securities-fixed interest
rate:
- quoted
Government and other bonds 1 121 1 506 1 322
Money market instruments (long- 805 - 851
term instruments)
- unquoted
Bonds - - 1
Redeemable preference shares 538 749 727
2 464 2 255 2 901
Financial assets at fair value 6 020 7 899 7 308
trough income
4. Non-current assets held for sale and discontinued operations
The assets and liabilities relating to Santam Europe and
Westminster Motor Insurance Association have been presented as
"held for sale" following a decision to dispose of both these
operations within the next 6 months. During the first six months
of 2008, the group sold the business operations of Westminster
Motor Insurance Association effective 1 January 2008. Although
new business is still written on the licence of Westminster
during the transition period, this is fully reinsured in terms of
the sales agreement. Processes are well under way to sell the run-
off businesses of the two discontinued entities.
Analysis of the result of discontinued operations
Gross written 210 395 932
premium
Net premium 30 382 872
Net insurance 392 323 641
premium revenue
Net investment 12 41 82
and reinsurance
income
Net profit on 17 - -
sale of business
operations
Net insurance 381 310 725
benefits and
claims
Expenses 92 81 188
Loss before tax (52) (27) (190)
Tax (11) 6 22
Loss for the (63) (21) (168)
period from
discontinued
operations
Reviewed Reviewed Audited
At 30 June 08 At 30 June 07 At 31 Dec 07
R R R
million million million
5.Debt
securities - at
fair value
through income
Debentures 955 586 955
issued
Fair value (167) (33) (47)
adjustment
788 553 908
During 2007 the company issued unsecured subordinated callable
notes to the value of R1 billion in two tranches. The fixed
effective rate for the R600 million issue was 8.6% and 9.6% for
the second tranche of R400 million, representing the R203
companion bond plus an appropriate credit spread at the time of
the issues. The fixed coupon rate, based on the nominal value of
the issues, amounts to 8.25% and for both tranches the optional
redemption date is 15 September 2017. Between the optional
redemption date and the final maturity date of 15 September 2022,
a variable interest rate (JIBAR-based) plus additional margin
will apply.
Per conditions set by the Regulator, Santam is required to
maintain liquid assets equal to the value of the callable notes
until maturity. The callable notes are therefore measured at fair
value to minimise undue income statement volatility.
6.Investment income
Dividend income 173 106 262
Interest income 182 167 402
Foreign exchange differences 17 6 2
372 279 666
7.Tax
South African normal taxation
Current year 72 314 716
Charge for the year 63 295 464
STC 9 19 252
Prior year 2 23 30
Foreign taxation 9 4 18
Income taxation for the year 83 341 764
Deferred taxation (90) (61) (222)
Current year (96) (61) (206)
STC 6 - (16)
Total taxation as per the income (7) 280 542
statement
Reconciliation of taxation rate (%)
Normal South African taxation rate 28.0 29.0 29.0
Adjust for
- Exempt income (20.6) (2.8) (3.6)
- Investment results (26.4) (3.2) (8.5)
- STC 11.8 1.6 13.2
- Other 3.0 (2.0) 0.2
Net reduction (32.2) (6.4) 1.3
Effective rate (%) (4.2) 22.6 30.3
8.Business combinations
On 9 April 2007 the group increased its investment in Admiral
Professional Underwriting Agency (Pty) Ltd from 28.9% to 70% and
on 8 November 2007 to 100%. During 2008 an additional amount of
R3 million was paid as part of the purchase agreement.
Purchase consideration paid 3 30 61
Net asset value acquired - 9 (16)
Less: Investment in associated share - (9) 7
previously acquired
Goodwill 3 30 52
Reviewed Reviewed Audited
At 30 At 30 At 31 Dec
June 08 June 07 07
R R R million
million million
9.Earnings per share
Basic earnings per share
Profit attributable to the company`s 100 928 1 050
equity holders (R million)
Weighted average number of ordinary 112.40 115.45 113.67
shares in issue (million)
Earnings per share (cents) 89 804 924
Earnings per share - Continuing 145 823 1 071
operations (cents)
Earnings per share - Discontinued (56) (19) (147)
operations (cents)
Diluted earnings per share
Profit attributable to the company`s 100 928 1 050
equity holders (R million)
Weighted average number of ordinary 112.40 115.45 113.67
shares in issue (million)
Adjusted for share-options 0.61 1.53 1.14
Weighted average number of ordinary 113.01 116.98 114.81
shares for diluted earnings per
share (million)
Diluted basic earnings per share 88 793 914
(cents)
Diluted basic earnings per share -
Continuing operations (cents) 143 811 1 061
Diluted basic earnings per share -
Discontinued operations (cents) (55) (18) (147)
Headline earnings per share
Profit attributable to the company`s 100 928 1 050
equity holders (R milion)
Adjust for:
Profit on sale of subsidiaries and - (1) (20)
associates
Headline earnings (R million) 100 927 1 030
Weighted average number of ordinary 112.40 115.45 113.67
shares in issue (million)
Headline earnings per share (cents) 89 803 906
Headline earnings per share - 145 821 1 054
Continuing operations (cents)
Headline earnings per share - (56) (18) (148)
Discontinued operations (cents)
Diluted headline earnings per share
Headline earnings (R million) 100 927 1 030
Weighted average number of ordinary
shares for diluted earnings per share 113.01 116.98 114.81
(million)
Diluted headline earnings per share 88 793 897
(cents)
Diluted headline earnings per share -
Continuing operations (cents) 143 811 1 043
Diluted headline earnings per share -
Discontinued operations (cents) (55) (18) (146)
COMMENTARY
Santam experienced a challenging first six months of 2008. From an
underwriting perspective, growth and underwriting profit in southern Africa
were satisfactory. Overall earnings for the group were however well below
the 2007 levels, mainly attributable to poor investment results. Headline
earnings of R100 million were 89% lower than the same period in 2007,
equating to a headline earnings per share of 89 cents compared to 803 cents
in 2007.
The group`s southern African operations achieved an 8% increase in gross
written premiums which was pleasing, given the softer market and the
corrective action taken by Santam to procure and retain quality business.
Growth was achieved across most classes of business.
As expected, the net underwriting result for the continuing operations
declined during the first half of the year to R326 million from R469
million in 2007. The overall net underwriting margin remained healthy at
5.7%. Underwriting performance of the personal and commercial business, as
well as the specialist classes, met or exceeded expectations in the first
six months, despite several catastrophic flooding events in KwaZulu Natal.
However, in line with industry experience, Santam incurred a number of
large industrial accident-and-fire related claims during this period which
adversely affected the underwriting margin in the corporate business unit,
contributing to the negative property class performance. Although this unit
recorded a loss for the six months compared to a profit in the
corresponding period, the diversification of Santam across business lines
as well as the current reinsurance programme kept the overall underwriting
margin healthy. Of the specialist classes, the liability and engineering
businesses performed well while the crop business experienced a return to
profitability. The net acquisition cost ratio of 25.1% increased slightly
from the 24.9% for the same period in 2007 due to expenditure on the
strategic projects aimed to reposition the company.
In line with the disclosure in the annual financial results for 2007, the
European operations are treated as "Discontinued operations" as defined by
IFRS 5 - Non-current assets Held for Sale and Discontinued Operations. In
total the discontinued operations showed an after tax loss of R63 million
for the six months against a loss of R21 million for the equivalent period
in 2007. Santam has made good progress in disinvesting from its European
insurance operations. The ongoing business operations of Westminster Motor
Insurance Association were sold for a profit of R17 million, net of
goodwill write-off. In Santam Europe, the run-off business showed an
underwriting loss for the period due to higher than expected claim levels
as well as the necessity for additional reserving to facilitate the sale of
the company. The company has been sold, subject to some suspensive
conditions.
As a direct result of the special dividend payment of R2.5 billion at the
end of 2007, the deployment of the company`s float (funds generated by
insurance activities) changed from only being invested in interest bearing
instruments to also include an equity component. The benefit from the
higher interest rates and average float levels, were countered by the
negative equity returns during the six months. Consequently the investment
return on insurance funds of R129 million reduced from R144 million. Action
was taken towards the end of the reporting period to eliminate the equity
exposure in the float. The group`s operating activities generated a healthy
R981 million in cash during the first six months of 2008, which was
slightly more than the R956 million generated during the same period in
2007.
The combined effect of the insurance activities of the continuing
operations resulted in a net insurance margin of 8% for the past six months
compared to 11.9% for the comparable period in 2007.
Continuing the trend set in the last quarter of 2007, the performance of
the investment portfolio was under pressure during the first six months of
2008. Although the higher interest rates had a positive impact on cash
related investments, the equity portfolio performed significantly below
the exceptional performance in the first half of 2007, especially due to a
severe reduction in the value of financial and industrial stocks. As
previously indicated the company`s equity portfolio is overweight in the
underperforming financial and industrial sectors whilst underweight in
resource shares. Cognisance should also be taken of the fact that the
investment portfolio reduced substantially due to the buy-back of shares
and payment of the special dividend in 2007.
The tax credit of R7 million for the first six months of 2008 was mainly
due to by the large dividend income as well as differences between
accounting and capital gains tax losses on the bond investment portfolio.
Despite the group`s lower net earnings, the solvency ratio of 40% was well
within the long-term target and slightly lower than the 42% reported at
the end of 2007.
No further allocations were made to beneficiaries in terms of Santam`s
Broad Based Black Economic Empowerment (BBBEE) scheme. The process for
allocating units to black business partners progressed well and it is
expected that an allocation will be made during the second half of the
current year.
The board would like to extend its gratitude to Santam`s management, staff,
brokers and other business partners for their efforts and contributions
during the past six months.
PROSPECTS
Underwriting margins are expected to remain under pressure due to the
softer market, both in commercial and personal lines, and could be
especially challenging considering the anticipated deterioration in global
and domestic economic conditions. Of particular concern is the increased
inflationary environment, reduction in disposable income of individuals and
deteriorating public infrastructure in some areas. Having the benefit of
diversification, Santam is well positioned to face these challenges.
In light of the volatility of global and local financial markets, the
capital growth of our investment portfolio during 2008 could be under
further pressure. Taking cognisance of our capital levels, we need to
maintain appropriate exposure to the various asset classes. In line with
general consensus we expect interest rates to remain at current levels for
the foreseeable future, which will have a positive impact on our cash-
related investment returns.
DECLARATION OF DIVIDEND (NUMBER 109)
Notice is hereby given that the board has declared an interim dividend of
166 cents per share (2007: 166 cents). Shareholders are advised that the
last day to trade "cum dividend" will be Friday, 12 September 2008. The
shares will trade "ex dividend" from the commencement of business on
Monday, 15 September 2008. The record date will be Friday, 19 September
2008, and the payment date will be Monday, 22 September 2008. Shareholders
may not dematerialise or rematerialise their shares between Monday, 15
September 2008, and Friday, 19 September 2008, both dates inclusive.
AUDITORS` REPORT
The company`s external auditors, PricewaterhouseCoopers Inc, have reviewed
the condensed financial report. A copy of their unqualified review opinion
is available on request at the company`s registered office.
On behalf of the board
DK Smith IM Kirk
Chairman Chief Executive Officer
27 August 2008
Non-Executive Directors
BTPKM Gamedze, DCM Gihwala, JG le Roux, NM Magau, JP Moller,
RK Morathi, P de V Rademeyer, J Rowse, GE Rudman,
DK Smith (Chairman), J van Zyl, BP Vundla
Executive Directors
IM Kirk (Chief Executive Officer),
MJ Reyneke (Chief Financial Officer)
Company Secretary
Sana-Ullah Bray
Santam Head Office and Registered Address
1 Sportica Crescent,
Tyger Valley, Bellville, 7530
P.O. Box 3881, Tyger Valley, 7536
Tel: 021 915 7000
Fax: 021 914 0700
www.santam.co.za
Transfer Secretaries
Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg 2001
P.O. Box 61051, Marshalltown, 2107
Tel: 011 370 5000
Fax: 011 688 7721
www.computershare.com
Sponsor
Investec Bank Limited
The results are available on our website: www.santam.co.za
Date: 27/08/2008 14:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
